NEW YORK-BASED FINANCIAL ADVISOR ARRESTED
ON FEDERAL CHARGES OF HYPING STOCK FOR PAY

The president of a New York financial advisory firm who made numerous television appearances to recommend stocks was arrested this morning on federal charges of touting the stock of an Internet marketing company and failing to disclose that he received $100,000 in cash and tens of thousands of shares of company stock in exchange for his recommendations.

Courtney Smith, 53, was arrested early this morning at his Manhattan apartment pursuant to a nine-count indictment that was returned by a federal grand jury in Los Angeles on February 3. Smith is expected to make his first court appearance this afternoon in United States District Court in Manhattan.

The indictment alleges that Smith touted the stock of GenesisIntermedia, Inc. (NASDAQ: GENI), a now-defunct marketing and Internet company that was located in Van Nuys, California. GENI was best known for marketing products like the "Ab Twister" and the "Men are from Mars, Women are from Venus" relationship products via infomercials broadcast on cable television channels.

According to the indictment, between late 1999 and mid-2001, Smith made numerous appearances on financial programs televised on CNN, CNBC, and Bloomberg Television. During those appearances, he promoted GENI as a "very hot speculative pick" with a business that was "exploding in revenues." However, GENI suffered net losses of $8.2 million in 1999, $33.5 million in 2000, and $119 million for the first three quarters of 2001, right before shutting down operations entirely. Nevertheless, Smith's television appearances were followed by increases in the price of GENI stock. For example, on February 25, 2000, the same day Smith recommended GENI as his "Double Your Money Pick" during a morning appearance on CNBC Market Watch, the price of GENI shares rose 58 percent.

In exchange for promoting GENI, Smith received money and shares of GENI stock from the company, according to the indictment. Smith allegedly was paid $100,000 from GENI, which was secretly routed to Smith through a vitamin-importing company that his girlfriend owned at the time. The indictment further alleges that Smith received 72,000 shares of GENI stock - valued at $1.2 million at the time of transfer - which were also secretly transferred to Smith through his girlfriend's company. Smith did not disclose either payment to the investing public. Instead, Smith allegedly attempted to disguise the payments through a series of fraudulent transactions in which he purported to have sold a customer mailing list and an internet website to GENI. According to the indictment, the mailing list and website had little or no commercial value.

The indictment charges Smith with conspiring with a high-ranking officer and substantial shareholder of GENI to violate the securities laws through his paid promotion of the stock. Smith is also charged with eight substantive counts of violating federal securities laws for failing to disclose the payments he received for promoting GENI on television. If he is convicted of the nine counts in the indictment, Smith faces a maximum possible sentence of 45 years in federal prison.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

The charges against Smith are the product of extensive investigation by the Federal Bureau of Investigation, which received assistance from the United States Securities and Exchange Commission.

Previously, Kenneth D'Angelo, 62, of Edison, New Jersey, pleaded guilty to participating in a complex scheme that manipulated GENI's stock price for the purpose of collecting more than $130 million in loans that were backed by the inflated stock.